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Industry Guide:

Passenger Transportation

 
Please click here to download complete guide.

 

FREQUENTLY ASKED QUESTIONS 

1. Are meals and beverages provided to passengers subject to GST?

Supply of meals and beverages on domestic passenger transportation follows the status of the supply of transport provided that meals or beverages are not sold and charged separately, i.e. the fare is inclusive of meals and beverages. 

2. If I drive my car to Penang Island using the ferry service, is GST chargeable on the ferry fare?

The ferry service is a means of passenger transportation which is exempted from GST. Therefore you are not required to pay GST on the fare charged by the ferry operator.

3. Is passenger service charge (airport tax) subject to GST?

Passenger service charge (PSC) for domestic and international air travel is subject to GST at standard rate. 

4. My company provides bus service to KTM passengers whenever there is any disruption to the train journey. Is my transportation service to KTM subject to GST?

You are making a supply of chartered bus service to KTM and the service is subject to GST at standard rate. 

5. An airline operator provides free return tickets to Langkawi under the Enrich travelers program. Is GST chargeable on the air fare?

Services given free are not considered as supply for GST purposes. Therefore the airline operator is not required to charge any GST on the air tickets given free of charge. 

6. A tourist hires a car from ABC Hire & Drive Company to travel in Malaysia. Is ABC Hire & Drive Company supplying passenger transport service? What is GST treatment on this scenario?

ABC Hire & Drive Company is not supplying passenger transport service. The company is only supplying a means of transport for the tourist and it is subject to GST at standard rate. 

7. David Transport Sdn Bhd based in Banting, is granted a permit from SPAD to operate employee / worker’s bus to supply passenger transportation for those who are working in Putrajaya area.

The supply of passenger transportation to the passenger is exempt supply.

8. ABC Electronic Sdn Bhd engages DSI Transport Sdn Bhd to provide a bus for the company’s employee. The employees have to pay monthly fare to DSI Transport Sdn Bhd. Is the transportation service subject to GST?

DSI Transport Sdn Bhd is providing passenger transportation for the employees which is an exempt supply and therefore GST is not chargeable.

9. In relation to the above question, what is treatment for the services provided by DSI Transport Sdn Bhd under a contract with ABC Electronic Sdn Bhd to supply the transportation services?

Services provided by DSI Transport Sdn Bhd to ABC Electronic Sdn Bhd is a taxable supply and subject to GST at standard rate. 

10. What is the GST treatment for the air tickets issued to me for the journey from Kuantan to Brisbane, Australia via KLIA?

The domestic flight service travel from Kuantan to KLIA qualifies for zerorating since it forms part of the international route to London with the condition that, both the domestic and international legs of the flight services are provided by the same airline operator for a one through journey from Kuantan to Brisbane.

11. Cafeteria Delicious provides food and beverages on board KTM train for domestic journey. Is the supply of food and beverages subject to GST?

Yes. The supply of food and beverages is subject to GST at a standard rate. Cafeteria Delicious is required to charge GST on the supply of food and beverages if it is a registered person. 

12. Is food and beverages provided on board the Butterworth to Bangkok Express train subject to GST?

The supply of food and beverages on board the train for the international route is subject to GST at standard rate. 

13. Konsortium Transnasional Berhad provides food and beverages services to the passengers on board in luxury coach from Kuala Lumpur to Singapore. Is the supply of food and beverages subject to GST?

The supply of food and beverages services is zero rate supply because it is composite supply to the transportation services. The fare paid by the passenger is inclusive of the food and beverages.

14. Lindungan Mesra Selalu is an insurance scheme that covers all passengers with valid tickets while travelling with Plusliner buses from Kuala Lumpur to Pulau Pinang. What is GST treatment on this insurance scheme?

The supply of insurance scheme is exempt supply because it is composite supply to the transportation services. All passenger is compulsory to be insured. The fare paid by the passenger is inclusive of this insurance scheme. 

15. Menara Holding Sdn. Bhd. is a pre-paid taxi fare operator in KLIA. Passenger will purchase taxi coupon from Menara Holding before boarding the taxi. What is GST treatment on this scenario?

The sale of taxi coupon to the passenger is an exempt supply. However, Menara Holding also make a supply to the taxi driver and the commission is subject to GST at standard rate. 

16. BERSIM Taxi Sdn Bhd provide taxi rental service to individual taxi driver by daily basis. The taxi rental inclusive of rental of vehicle, insurance and taxi permit?

The taxi rental is subject to GST at standard rated, even though it consist of different component of services. The GST treatment is based on the rental and not on the individual component.

17. Izzati used MyTaxi application to request for taxi services. MyTaxi will charge Izzati for it services for the arrangement of taxi. What is the GST treatment by MyTaxi? 

The arrangement services provided by MyTaxi is subject to GST at standard rate, meanwhile the taxi fare paid by Izzati is exempt supply. 
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L & Co always carry their services in professional way – well planning, in time, precise, friendly and professional. While we are stuck with problems, they can always advice us with industrial best practices and their views.
 
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ICT Automation (M) Sdn Bhd
www.ict.com.my
 

L & Co Plt.

Johor
18A & 20, Jalan Sasa 2,
Taman Gaya,
81800 Ulu Tiram,
Johor, Malaysia.

 
Tel +607-859 0410
Fax +607-863 1003
 
Kuala Lumpur
15-2, Dinasti Sentral,
Jalan Kuchai Maju 18,
Off Jalan Kuchai Lama,
58200 Wilayah Persekutuan,
Federal Territory of Kuala Lumpur.
Tel +603-2780 3885
Fax +603-7972 0007
 
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S1-3, 1-21-01,
Suntech @ Penang Cybercity (1575),
Lintang Mayang Pasir 3,
11950 Bayan Baru,
Penang, Malaysia
Tel +604-377 7075
Fax +604-619 2699
 
 
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